Exco Resources Inc., Dallas, (NYSE: XCO) plans to acquire producing properties and other assets in multiple fields in the Midcontinent, South Texas, Texas Gulf Coast and Oklahoma from Anadarko Petroleum Corp., The Woodlands, Texas, (NYSE: APC) for $860 million in cash.

The deal is in addition to plans to acquire Anadarko assets in the Vernon and Ansley fields in Jackson Parish, La., for $1.6 billion in cash. Those proved reserves are approximately 466 billion cu. ft. equivalent. (For more on this deal, see "Company Briefs," Oil and Gas Investor, February 2007.)

The $860-million package includes a 75% average working interest (59% average net revenue interest) in properties on 290,000 net acres in the Golden Trend, Watonga-Chickasha, Mocane-Laverne and Reydon areas in Oklahoma, and the Felicia, Speaks and Cage Ranch areas of South Texas.

Net production is approximately 103 million cu. ft. of gas equivalent per day from 1,327 producing wells, a majority in the Midcontinent area. Proved reserves are more than 400 billion cu. ft. equivalent (87% gas, 72% proved developed; 76% Midcontinent).

Exco has identified approximately 200 proved undeveloped drilling opportunities (88% Midcontinent). Approximately 91% of the Midcontinent reserves are operated and 85% of the South Texas properties are operated.

The Oklahoma portion alone will bring Exco's Midcontinent production to more than 75 million cu. ft. equivalent per day. Exco chief executive Douglas H. Miller says, "We continue to stress long reserve life and these assets being acquired have an overall reserve-to-production ratio of over 17 years."

Miller adds that, while South Texas is not a company focus area, those assets represent "an outstanding package of properties in excellent trends."

Lehman Brothers is financial advisor to Anadarko and Tristone Capital marketed the assets. The deal will be funded with a new revolving credit facility and a bridge loan. On the North Louisiana divestiture, Jefferies Randall & Dewey is financial advisor to Anadarko.

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